HOUSING associations in Scotland will be able to borrow from a £50million European lending facility, it has been announced.

The Government said the fund will encourage the development of new affordable homes by offering housing organisations an alternative private lending source.

Housing minister Alex Neil was meeting with the vice president of the European Investment Bank in Brussels today to seal the deal.

Mr Neil said the agreement signalled a "new dawn" for Scotland's investment prospects.

He said: "Opening up access to a European fund of this size will give housing associations access to another lending source, with competitively priced loans.

"I believe this signals a new dawn in Scotland's ability to attract and access European investment.

"There is also a real opportunity to replicate this success across other areas and provide a boost for Scotland's economic recovery."

The EIB is the financing institution of the European Union and provides loans for projects including the construction of homes and transport infrastructure.

The funds will be provided to housing associations through The Housing Finance Corporation, a company that makes loans to regulated associations in the UK.

THFC chief executive Piers Williamson said: "We welcome this opportunity to greatly extend our existing Scottish commitment and look forward to working with a broad range of Scottish Housing Associations over the coming months to help them deliver new housing in the communities they serve."